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NATCHEZ — Gov. Tate Reeves on Thursday announced reforms in Medicaid reimbursement in Mississippi, which he said would generate approximately $700 million for hospitals across Mississippi.

Kay Ketchings, public relations director for Merit Health Hospital in Natchez, provided reaction on behalf of the hospital.

“Like many hospitals across Mississippi, the care we provide to Medicaid patients costs us more to deliver than our state Medicaid program is able to reimburse. The governor’s proposals will help to close some of that cost gap, enabling us to support our community’s health care safety net, create jobs, and continue to deliver excellent care to Natchez residents. It is important to note that the proposals require approval of the Centers for Medicare and Medicaid Services, which will take some time,” she said.

Reeves, who is running for a second term as governor, has been steadfast in walking the Republican line of no Medicaid expansion in Mississippi. Many in the state’s healthcare industry say that stance has brought many Mississippi hospitals to the brink of closure.

“Today’s action will have a major impact, but this is still just the beginning. Our eyes are set on the future, and we aim to continue ushering in reforms that strengthen Mississippi’s healthcare system no matter where you live in the state,” Reeves said.

The first initiative, known as the Mississippi Hospital Access program will provide direct payments to hospitals serving patients in the Mississippi Medicaid managed care delivery system. With these directed payments, hospitals would be reimbursed near the average commercial rates, which has been considered the federal ceiling for Medicaid reimbursements in managed care.

The second initiative will supplement Medicaid base payments rates for hospitals by reimbursing inpatient and outpatient hospital services in the fee-for-service system up to the Medicare upper payment limit. This payment mechanism, known as UPL, is calculated similarly to the one-time emergency payment of $137 million that hospital received through the Mississippi Division of Medicaid earlier this year, Reeves said in his press release.

To minimize the recurring impact on the state’s general fun, the non-federal share of the directed and supplemental payments will be financed through assessments hospitals pay annually to the Medicaid program through a formula set out in state law.

Hospitals are projected to net an increase of $689 million through these initiatives, after accounting for the funds the hospital made to help finance the initiatives.

The federal Centers for Medicare and Medicaid Services must approve both proposals, which Reeves in his press release said are being submitted. If approved, he said payments to hospitals would be retroactive to July 1 of this year.